The local share market has managed to recover nearly all of its losses after the Reserve Bank left interest rates on hold, as expected.
The S&P/ASX200 had been down by as much as 48 points, or 0.65 per cent, earlier on Tuesday but climbed in late afternoon trade to finish on the highs of the day, closing down just 4.5 points, or 0.06 per cent, at 7,314.3.
The broader All Ordinaries closed 8.9 points lower at 7,516.8, a drop of 0.12 per cent.
The rebound came after the Reserve Bank kept rates on hold for a third straight month, in Governor Philip Lowe's final monetary policy meeting before he hands over to deputy Michele Bullock on September 18.
The decision was almost universally expected, and the RBA left its forward guidance almost unchanged from past statements.
"Picking over some of the minor language tweaks, we detect a little more confidence that inflation is coming down," wrote RBC Capital Markets macro rates strategist Robert Thompson.
But the local currency - which has been under pressure since mid-July - dropped under 63.80 cents for the first time in 10 months following the decision.
The Aussie was buying 63.75 US cents, from 64.55 US cents at Monday's ASX close.
Attention will now turn to second-quarter gross domestic product figures set to be released by the Australian Bureau of Statistics on Wednesday.
In company news, Qantas dominated headlines on Tuesday, closing down 0.2 per cent to $5.64 after chief executive and managing director Alan Joyce brought forward his retirement by two months amid withering public scrutiny on several fronts.
Mr Joyce said it was clear the airline needed to move forward with renewal and the best thing he could do under the circumstances was hand over to CEO-designate Vanessa Hudson, effective on Wednesday.
The heavyweight mining sector dipped 0.3 per cent, with Fortescue Metals falling 0.7 per cent to a three-month low of $20.05, BHP gaining 0.4 per cent to $46.10 and Rio Tinto edging 0.2 per cent higher at $117.32.
The Big Four banks were mixed, with Westpac the biggest loser, dropping 1.4 per cent to $21.53 after the Australian Securities and Investments Commission sued it in Federal Court, alleging Australia's oldest bank failed to respond to financial hardship notices from hundreds of customers.
Westpac blamed the issue on a technology failure, said it was deeply sorry and had self-reported the incident to the regulator.
ANZ was basically flat at $25.20 and CBA and NAB both gained 0.2 per cent, at $102.22 and $29.01, respectively.
Origin Energy, trading ex-dividend, fell 2.9 per cent to $8.38 as the NSW government announced it would enter talks with the utility about extending the life of its Eraring Power Station on the state's central coast beyond its planned closure date of 2025.
The power station is Australia's largest, and an independent report released Tuesday found the state would face reliability challenges with electricity supply in coming years as coal-fired power stations went offline.
ON THE ASX:
* The S&P/ASX200 index finished Tuesday down 4.5 points, or 0.06 per cent, at 7,314.3.
* The All Ordinaries dropped 8.9 points, or 0.12 per cent, to 7,516.8.
One Australian dollar buys:
* 63.75 US cents, from 64.55 US cents at Monday's ASX close
* 93.63 Japanese yen, from 94.62 Japanese yen
* 59.19 Euro cents, from 59.89 Euro cents
* 50.65 British pence, from 51.25 pence
* 108.37 NZ cents, from 108.72 NZ cents
The Aussie was buying 63.92 US cents, from 64.71 US cents at Monday's ASX close.